How to vote with the economy in mind? – Desert News

Whether it’s a local, state, or national election, the economy is always an important issue for voters. And polls suggest things will be no different for the fast-approaching election in November. If you’ve listened to political commentary in the last 30 years, you’ve probably heard the common refrain: “It’s the economy, stupid.” The phrase, popularized in the early 1990s by James Carville, a political strategist then working for President Bill Clinton’s campaign, is often used to suggest that voting for the economy, simply put, is what motivates voters. The problem is that there is nothing very simple about it.

Even if you want to vote for the economy, it has become difficult to discern which candidate will reflect your interests as each election cycle moves us further away from campaigns based on consistent policy. Instead of platforms built on an internally consistent set of values, candidates run based on a set of ideas that appeal to core voters, resulting in an inconsistent record on economic issues.

As a result, both the right and the left have adopted their own political projects that conflict with their historical values.

For example, Democratic Party Vice President Kamala Harris’ recently announced proposal to give up to $25,000 to first-time home buyers conflicts with the party’s populist ideals of representing “the people” rather than the elite. On the surface, this benefit would seemingly help a sympathetic audience: people who are struggling to buy their first home. But the reality is that credit would likely do little more than stimulate inflation in the housing market by benefiting current owners and developers at the expense of future buyers who will face higher prices, thereby erasing the benefit of grant.

This is not just a Democratic problem. An example of analogous behavior on the right is Republicans’ continued support for the mortgage interest tax deduction. This program gives government money to homeowners based on the amount of their mortgage. And it’s wealthy Americans who tend to have higher mortgages and therefore receive more aid. On the one hand, the mortgage deduction is consistent with the Republican principle of small government and low taxes. But on the other hand, generously subsidizing debt-financed homeownership distorts the functioning of an entire housing sector, undermining the long-held belief that a free market can set prices and allocate scarce resources of the most efficient and equitable way.

When these policies are presented as part of a conservative or progressive agenda, it becomes more difficult than ever to be a principled voter on the issue of the economy. Voting along party lines may not get you as far as before in terms of aligning your vote with a particular set of values, especially when it comes to economics.

Both the right and the left have adopted their own political projects which conflict with their historical values.

Economics is a vast and complex field. But a simple way for voters to evaluate policy using an economic lens is to determine whether an individual measure or set of policies aims to redistribute or increase the nation’s wealth. Progressive voters tend to be more supportive of policies that redistribute the country’s wealth, while conservatives tend to prioritize policies that support growth. Although policies can rarely directly produce growth, they can often create an environment that supports or hinders growth.

The classic and perennial example of pro-growth policy is cutting taxes. Reducing the burden of income or business taxes increases the reward for work or generating profits. The assumption is that individuals and businesses will work harder if they are able to keep more of the fruits of their labor. Working harder will ultimately lead to greater economic growth. Faster economic growth means the government will have to spend more on social programs to help Americans in need.

On the other hand, other voters will prefer candidates and programs more focused on redistributing the wealth our country currently generates rather than increasing the economic pie. Redistributive policies are really anything that allows the government to collect taxpayer money and return it in the form of subsidies, tax credits, or spending on targeted programs. Indeed, the “distribution” of wealth changes following this type of intervention. Examples of redistributive policies include spending on social welfare programs such as Medicaid, which provides health care to low-income Americans, as well as Temporary Assistance for Needy Families and student loan forgiveness.

Voting along party lines may not get you as far as before in terms of aligning your vote with a particular set of values, especially when it comes to economics.

Using this dichotomy between growth and redistribution can help Americans see beyond the rhetoric and choose candidates and policy ideas that better align with their own values. This exercise will be particularly important in November, because neither candidate adheres very strictly to the values historically defended by their party.

Student loan forgiveness is supported by Harris, but student loan forgiveness, a redistributive policy, is not about moving funds from the “haves” to the “have-nots.” Instead, like the mortgage interest deduction, it is a gift to an already affluent population that takes out loans to attend the most expensive schools. Given that it will cost up to $1.4 trillion to implement, it would require future tax increases to cover the cost, which would also discourage growth.

Harris also supports policies to prevent what she calls “price gouging.” His position draws on the insecurity of Americans who have endured rising prices at grocery stores and gas pumps in recent years, but does not constitute sound economic policy. Constraining companies on the prices they charge isn’t a new idea, but it’s generally one that has been historically used in places whose economies we wouldn’t want to emulate. (Think Venezuela, Cuba, North Korea, and the former Soviet Union.) Additional price regulation will discourage companies from entering or staying in the game — a development that will ultimately hurt consumers which would otherwise benefit from healthy competition. In reality, it will discourage innovation and growth.

Former President Donald Trump, the Republican nominee, also appears to be breaking with the Republican Party’s historic economic vision by supporting an agenda of isolationist policies. As outlined in a 16-page document outlining the party’s priorities, Trump would likely adopt policies limiting outsourcing and requiring, or at least encouraging, domestic production of manufactured goods. There may be a strong case for policies that sometimes restrict the movement of goods and services across borders, but they come at the expense of limiting growth. The reason outsourcing and offshoring happens in the first place is because building things overseas is often better for the bottom line. And what’s good for the bottom line is also good for economic growth.

Perhaps more worrying, from a conservative perspective, is that Trump has suggested making the Federal Reserve, which has historically pursued monetary policy aimed at promoting economic growth and stability independent of the political process, a political institution . Even if Trump claims that his monetary policy would be superior to that proposed by the independent Federal Reserve, he would likely be tempted to propose a policy that would have a positive impact on his administration rather than prioritizing long-term growth. This is not an attack on Trump in particular. The fact that politicians are somewhat self-serving is the reason for an independent Federal Reserve in the first place.

Like me, most voters care deeply about more than one issue. So the trade-off between redistribution and growth may be just one small piece of a larger puzzle that voters will face when deciding how to vote in November. But at least by using this framework to evaluate economic policies, voters can have a better idea of their candidate’s priorities on the economy and can vote accordingly.

Beth Akers is a Senior Fellow at the American Enterprise Institute and a contributor to the Sutherland Institute.

This story appears in the October 2024 issue of Desert Magazine. Learn more about how to subscribe.